Although human alveolar epithelium has long been known to be permeable to insulin, actual diabetes management by insulin administration via lung awaited development of a practical delivery system. A new dry powder insulin formulation and aerosol delivery device permits reproducible pulmonary delivery of rapid-acting insulin in therapeutic amounts with 1-2 inhalations per dose. To compare the safety and efficacy of a regimen using this inhaled insulin (INH) vs. a conventional injection regimen (SC), 51 patients with insulin-treated type 2 diabetes (NIDDM) from 10 sites were randomized, after a 1-month run-in, to either INH or SC treatment for 3 mo. SC group continued their pre-study insulin regimen (2-3 injections/day), while INH received pre-meal INH plus a bedtime Ultralente insulin injection. Baseline HbA- {1c} was 7.8 in SC and 8.7 in INH. QID home monitoring in all patients was reviewed weekly and insulin adjusted to target premeal glucose 100-160 mg/dl.